Australia

Australia
Labor government delivers lower than expected deficit
The federal government recorded a smaller-than-expected deficit of A$10 billion for the 2024-25 financial year despite a sharp increase in spending. This is an improvement on the previously predicted A$27.9 billion deficit. Jim Chalmers said in dollar terms, the current Labor government has made more progress in the budget in three years than any other government in history. “We’ve turned two big Liberal deficits into two substantial Labor surpluses in our first two years, significantly reduced the deficit in our third year, and continued to pay down debt,” he said in a statement. “Today’s figures show that the deficit in our third year is around a fifth of the forecast we inherited from the Coalition, and around a third of the forecast before the election earlier this year.” The statement also said that Labors three Final Budget Outcomes have delivered a cumulative underlying cash balance of A$28 billion compared to the A$181 deficit inherited from the previous government. “The budget is in much better nick because we’ve paid down almost $200 billion of Liberal debt, demonstrated spending restraint, overseen the creation of more than 1.1 million jobs and got real wages growing again,” Chalmers said. This places
Australia
Albanese government to invest $1.1bn in cleaner fuel
The federal government announced that it will invest A$1.1 billion to drive production into cleaner fuel options in a push to decarbonise hard-to-abate sectors that threaten climate goals. The government announced a 10-year grants program to encourage the private sector investment in on-shore production of lower-emission fuels, including so-called renewable diesel and sustainable aviation fuels. Petrol alternatives made from feedstocks like canola, sorghum, and sugar have long been touted as a solution to reduce emissions in aviation, cargo shipping, and heavy road freight. This announcement comes before Prime Minister Anthony Albanese is expected to announce Australia’s 2035 emissions reduction target range before formally submitting it to the UN later this month. It also follows the release of the landmark national climate risk report, which outlines the severe and far-reaching social and economic consequences of the climate crisis in Australia. It found that liquid fuels accounted for around 32% of Australia’s total emissions, making the switch to cleaner alternatives critical for hitting net zero. The $1.1 billion funding will be provided under a competitive grants system and has been welcomed by the Low Carb
Australia
Australian government to invest $30m in VET studies
The federal government will invest A$30 million to boost the number of construction teachers in the VET system. The money will be used to increase the number of electrical and construction teachers, as well as those from Indigenous backgrounds. In a speech to the National Press Club later today, Minister for Skills and Training Andrew Giles will say “equally valuing VET” will become one of the three priorities this term. “Nine out of 10 new jobs will require some form of tertiary education, approximately half VET and half higher education,” he will say. “We will only achieve the national goal of four in five Australians holding a TAFE qualification or a university degree if we break down that artificial barrier between vocational and higher education.” Another priority will be boosting lifelong learning, a key area of need identified at the recent economic reform roundtable. “It’s the concept that knits together how we should be thinking about supporting people to navigate a changing world, on their terms,” he said. “In the context of generative AI, and indeed more generally, we are witnessing changes in demand for skills and [we] should anticipate this accelerating.” This comes months after Giles told the
Australia
Tax reforms key takeaway from productivity summit
Treasurer Jim Chalmers has opened the door for a broader tax reform that addresses intergenerational inequity as he wraps up his three-day productivity summit. While there was no clear consensus on the specifics of the tax reform, there was a general recognition among the 23 attendees that the system was unfairly skewed away from young people. “I think our tax system is imperfect, and one of its most troubling imperfections is best seen through an intergenerational lens, which is why we take our responsibilities to the coming generations seriously,” Chalmers said. Chalmers also kept the possibility of adopting the Productivity Commission recommendation to introduce a headline company tax of 20% for businesses with turnovers under A$1 billion open. Tax rates of 30% would remain for companies with turnovers of A$1 billion or more, and all businesses, regardless of turnover, would pay a 5% tax on cash flow, which could be offset by investment. According to Chalmers, there is no need for another tax review and that the government would formulate reforms based on the following three principles:“A fair go for working people, including in intergenerational equity terms”“An affordable, responsible way to incentivise busines
Australia
AI, upskilling take centre stage at economic roundtable
The first day of Jim Chalmer’s economic reform roundtable focused on a range of economic reforms, with discussions regarding training, skills and worker mobility. Top economists, business leaders, and unions were part of the discussions in Canberra aimed at boosting productivity and the Australian economy. One of the starting blocks of the three-day roundtable was how to take advantage of the opportunities presented by artifical intelligence (AI). Prime Minister Anthony Albanese said that the new technology presented both opportunities and challenges, but its impacts on productivity are still largely unknown. “We have the biggest revolution since the industrial revolution with clean energy. We have a revolution that is less certain as well, artificial intelligence and new technology,” he said. “The impact of that on the nature of work, on the economy and the way that we function as a society as well.” While some ideas from the forum will be addressed more immediately, Albanese said some ideas, like AI, would require a longer period of work and would be included in the next federal budget. “I don’t expect that you will solve all of those issues in the next three days, but what you will have is ideas and input t

Australia
Productivity summit focus on boosting national economy
Top economists, business leaders and unions are set to gather in Canberra for the three-day productivity summit. Treasurer Jim Chalmers has called upon those attending the summit to come up with “concrete” ideas to help turbocharge the economy. Chalmers said he will urge participants to focus on three objectives: making the economy more productive to lift living standards, measures to sandbag Australia’s economy and repairing the budget. "Global uncertainty surrounds us, big economic challenges confront us, and our ambitions must meet this moment," he is expected to say. "Our progress in the near term … gives us the time and space to attend to the bigger, more persistent structural issues." This comes as Australia’s productivity rate continues to fall. According to the Australian Bureau of Statistics (ABS), the long-term 20-year average growth rate fell to 0.9% in 2022-23. This is a 1.2% fall from 2021-22 and a 1.8% drop from 2003-04.Credit: ABSThe Reserve Bank also forecasts a downgrade of productivity growth, down from 1% to 0.7% last week. Other important items on the table include NDIS reform, due to its rapid growth in the federal budget and a potential EV road user charge. Annual costs for the NDIS ar
Australia
Australia to invest $500m into Vanuatu under new pact
Australia will invest A$500 million into Vanuatu over the next decade under a new deal between the two countries, as China seeks to expand its influence in the Pacific. The Nakamal Agreement has been initialed by Australian and Ni-Vanuatu cabinet officials and will be ratified in September. It will replace a 2022 security pact. “What this does is acknowledge our shared history,” said Australian Deputy Prime Minister Richard Marles. “It acknowledges our shared economic connection. It makes clear that it is core business for Australia to be engaged in the human development of Vanuatu.” “The agreement covers a wide range of bilateral issues, including infrastructure planning, economic development, and climate resilience initiatives in light of the devastating December 17th earthquake of 2024,” wrote Vanuatu’s Ministry of Justice and Community Services. The Nakamal Agreement comes amid China’s efforts to court Vanuatu as an economic and security partner. China’s government funded the construction of a $31 million presidential palace in Vanuatu’s capital last year. Marles, Foreign Minister Penny Wong, and Pacific Minister Pat Conroy joined Vanuatu’s Deputy Prime Minister Johnny Koanapo, Internal Affairs Minister Andrew N
Australia
EV charging taxes considered by Federal Government
The federal government is set to overhaul road user charging rules to cover electric vehicles as the sales of EVs continue to grow in Australia. New data from the Australian Automobile Association showed a record number of EVs were sold in the June quarter as they accounted for almost one in 10 new car sales. Anthony Albanese said that the new rules would be worked through this term of parliament. “What I believe is that we need money to ensure that roads are adequate, and that is a long-held belief,” Albanese said. “What we need to do is to work those issues through and to come up with a realistic plan that can be implemented. And we’ll await those discussions.” This follows the federal budget being affected by declining fuel excise revenue in the past few years as people switch to battery-powered vehicles, avoiding a 51.6 cents per litre tax on petrol and diesel used for road repairs. However, a high court ruling in 2023 delayed taxing on drivers after finding the Victorian Government’s attempt to impose a tax on EVs unconstitutional, as only the federal government had the power to impose excise taxes on consumption. Federal and state treasurers have since been discussing ways to tax EV drivers while maintai
Australia
Meat and potatoes diplomacy delivers win for Australia
Australia has secured the lowest possible tariff rate of 10% under President Donald Trump's sweeping reciprocal tariff regime, positioning exporters with a crucial competitive advantage, as higher levies devastate rival nations. The executive order, effective 1 August, excludes Australia from Annex I, confirming its continued 10% baseline rate while countries such as Canada face tariffs as high as 35% and New Zealand confronts a 15% levy. The European Union agreed to accept a 15% tariff rate alongside $750 billion in U.S. energy purchases and $600 billion in domestic investments by 2028.Market dynamics shift in Australia's favourAustralian Trade Minister Don Farrell described the outcome as "a vindication" for the government's diplomatic approach, stating that "Australian products are now more competitive into the American market" with “wine, beef, lamb, wheat in a relative sense cheaper into the United States”. The tariff differential creates immediate market opportunities - especially for wine and beef. Aussie wine exporters could capitalise on increased levies on European rivals, while beef producers gain ground against Brazilian competitors facing higher tariffs. Brazil's 50% tariff effectively renders Brazilian